9% GDP this year possible: Basu

Buoyed by robust performance of the economy in the second quarter, a top advisor in the finance ministry today said it is possible to record 9 per cent growth this fiscal.

"It is not impossible any more. We are very close to that," Chief economic advisor (CEA) Kaushik Basu told reporters when asked whether the economy will grow by 9 per cent in the current fiscal.

The robust second quarter GDP data also prompted the Finance Minister Pranab Mukherjee to say that the Indian economy will grow by 8.7-8.75 per cent in the current fiscal.

"We may be confident that at the end of this year the GDP growth will not be less than 8.7-8.75 per cent. I always go by conservative estimates," Mukherjee said.

GDP for the first half of the current financial year has risen to 8.9 per cent as against 7.5 per cent during the corresponding period of the last fiscal.

Basu said business services, which have done historically very well, grew by 8.3 per cent in the second quarter.

"This is worse than the past. If we can do well in this segment, then it is possible that we will break into 9 per cent sooner than we expected," he said on the sidelines of an international conference on economy organised by the Finance Ministry.

HSBC Group Country Head Naina Lal Kidwai said there is a very strong chance of Indian economy clocking 9 per cent growth this fiscal because underlying growth along all the aspects, including agriculture, is positive.

"We will see more investments by industry next year because in lots of companies capacity utilisation is 90 per cent plus," she said.

Finance Secretary Ashok Chawla, however, was not as sure whether the economy will expand by 9 per cent this fiscal.

"It is very difficult at this stage to say whether we will breach 9 per cent, but hope for the best," he said.

Prime Minister's Economic Advisory Council Chairman C Rangarajan also said that economy may grow a shade above 8.5 per cent this fiscal.

"I will still say it could be above 8.5 per cent," Rangarajan said when asked whether the economy would grow by 9 per cent.